Regarding the first question:

The course instructor provides the students with raw materials for manufacturing and gives them a grace period for payment until the end of the year to complete their projects, after which they can sell them. He may buy from them or they may sell to others.

Here are some points that need clarification: Firstly, there are hadiths and texts that govern the exchange of gold and silver. Among them are:

• Narrated by ῾Ubādat ibn aṣ-Ṣāmit (may Allāh be pleased with him) that the Messenger of Allāh (prayers and peace be upon him) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, equal for equal, hand to hand. If the types differ, then sell as you wish, provided that it is hand to hand.” [Narrated by Muslim].
• Narrated by Abū Sa῾īd al-Khudrī (may Allāh be pleased with him) that the Messenger of Allah (prayers and peace be upon him) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, hand to hand. If anyone gives more or asks for more, he has dealt in usury (ribā), equal in this both the giver and the recipient.” [Narrated by Muslim].
• Abū Sa῾īd al-Khudrī (may Allāh be pleased with him) reported: The Messenger of Allah (prayers and peace be upon him) said: “Gold for gold, like for like.” [Narrated by Muslim].
• Fuḍālah ibn ῾Ubayd al-᾽Anṣārī reported: “A necklace having gold and gems in it was brought to Allāh’s Messenger (PPBUH) in Khaybar and it was one of the spoils of war and was put to sale. Allāh’s Messenger (PPBUH) said: The gold used in it should be separated, and then Allāh’s Messenger (PPBUH) further said: (Sell) gold for gold with equal weight. [Narrated by Muslim].

From these ḥadīths and similar ones, it is understood that exchanging the same category and mutual exchange in the sales council is a condition for the sale of similar gold and silver. Therefore, excess and deferred payment are not permissible.

This is because gold and silver are types of currency, and increasing the quantity of the same type constitutes usury, while deferred payment is tantamount to usurious speculation, hence both are prohibited.

This is the opinion of the scholars of the various Islamic schools of thought.

Secondly: Types of mutual exchange (taqābuḍ) in sales:

Firstly, there is actual mutual exchange, which involves exchanging the goods for debt or the sold item for its price in the sales council. This is expressed in the noble ḥadīth by the phrase “hand to hand.” This phrase does not exclude the possibility of exceptions but rather represents the predominant circumstances (the majority ruling), as in the Quranic verse: “Multiplying it many times over.” [Aāli-῾Imrān: 130], regarding usury. Even though the little amount of multiplication is also prohibited, this phrase itself is not a literal expression but rather a metaphor, as hand-amputated people are allowed to in engage in sales and exchange. Therefore, the phrase is a metaphor for mutual exchange.

Secondly, there is deemed mutual exchange, where one or both items of the sale (goods and debt) occur outside the sales council, within acceptable contractual norms.

Most examples of this in our time include online transactions, payment with credit cards, and bank restrictions on accounts, and similar practices.

This type has become customary and regulated by laws, becoming an accepted norm that does not contradict established principles. According to scholars of Islamic jurisprudence, customary practices hold the same weight as stipulated conditions, as clarified in the legal rule. Especially since “hand to hand” is a linguistic metaphor, as we have explained.

Thirdly: There is a distinction between raw material and the manufactured product. For instance, bread differs from flour (according to the Ḥanafīs, Mālikīs, and some Ḥanbalīs like Ibn Taymiyyah) and from wheat, and anything that varies in kind does not involve usury. This is supported by the saying of the Prophet (prayers and peace be upon him): “If the types differ, then sell as you wish.”

Similarly, this applies to manufactured gold. Ibn Taymiyyah states: “It is permissible to sell manufactured jewelry of gold and silver for something of the same type without the condition of similarity, and any additional payment made is considered payment for craftsmanship, whether the sale is immediate or deferred, as long as it [the additional payment for craftsmanship] is not intended as a price.”

Ibn al-Qayyim (may Allāh have mercy on him) says: “Permissible jewelry, through permissible craftsmanship, has become like the same category of clothing and goods, not from the category of currencies. Therefore, they are not subject to Zakāh. Usury does not apply in exchanging them with currencies, just as it does not apply in exchanging currencies with other goods, even if they are of a different category. It, through manufacturing, has moved away from the purpose of currencies and has been prepared for trade. Therefore, there is no objection to selling it for the same of its type.”

This statement is attributed to our master Mu῾āwiyah from the companions, and to a group of jurists (fuqahā᾽) from Iraq such as Al-Hasan, Ash-Sha῾bī, and ᾽Ibrāhīm (may Allāh have mercy on them) and it is the correct opinion by the permission of Allāh. The jubbah (outer garment) is not clothing anymore; it has changed through manufacturing, just like shoes that are different from its raw material, leather.

The same applies to manufactured jewelry because it has changed through crafting into a commodity and lost its nature of being a currency, so it is permissible to sell it with excess and deferred payment.

As for the essence of the question: If the professor gives them manufactured gold and silver, then the details mentioned above apply, and I most likely prefer that it permissible to sell with excess and deferred payment.

If the professor gives them raw gold and silver, then if he intends to sell it, actual or deemed mutual exchange is necessary. If he intends to lease it, then it is permissible for him to sell the manufactured jewelry from it and pay them for their labor.

In this case, it is preferable for the sale to be made with a check equivalent to the value of the material given at the time of sale, and the professor postpones receiving his money until the manufacturing process is completed, following the criterion that we have mentioned.

As for the second and third questions, the answer to the first one suffices for both.

Fatwa issued by Dr. Khālid Naṣr